What happens when you pay premiums to a health insurer? First they set aside 65¢ to 75¢ of every dollar for claims they expect to pay on your behalf. The rest of the money they keep for their overhead and profit. After all they are in business like you with rent, equipment, employees, attorneys, sales people, advertising expenses and sky boxes at the game. If you knew you were going to have $500 in medical bills this year, would you be willing to give $700 to an insurance company to pay your bills?...   Of course not! That is exactly why the majority of American businesses self-insure their medical plans. They still buy insurance, but only for the large unexpected claims. For their smaller medical bills they only spend $500 to pay for $500 in claims. Thanks to the government's new Health Savings Account law, you can now take advantage of this same self-insuring principle. You set aside money tax free in your own Health Savings Account to pay for claims under a high deductible health plan. Interest earnings are tax free as are withdrawals for qualified health expenses. The money left over is yours to be used in future years or in retirement.